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Market consolidation and the current state of the UK grain industry means it is impossible for small, regional merchants to be profitable.

That was the message from Dalmark Grain as it announced it would no longer be involved in grain trading.

Matthew Dalton, the Dalmark corporate director, said they had tried to weather the storm but had now come to the decision they could no longer compete.

“To protect the parent company we have had to take this decision.”

’Creditors will be paid’

The shareholders have agreed in principle that Cefetra Limited will take on the stock and forward book – which was expected to be finalised and executed during February.

He emphasised the business had no liquidity or solvency issues and was fully cross-guaranteed by JE and VM Dalton Limited, a business which had net assets in excess of £7m.

“Creditors will be paid on time,” he added.

“We came to this decision now to make sure we did not get into that situation.”

’Sad day’

Going forward, Mr Dalton said they would be concentrating on the seed business with wholesale seed sales continuing to be successful.

Managing director of JE and VM Dalton Limited, Peter Fox said it was a “sad day”.

“We are fully committed to UK agriculture and have done everything we can to avoid this day, but given the structure of the market place, have had to finally accept that our involvement in grain is no longer realistic.

“I am pleased that we have come to this agreement with Cefetra over our contractual position, and particularly pleased that they have offered a job interview with each and every member of Dalmark Grain staff affected.”